<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>bg01opt.txt
<DESCRIPTION>OPTION AGREEMENT
<TEXT>
     STOCK OPTION AGREEMENT,  entered into on the 10th day of May, 2001, between
DCAP GROUP,  INC., a Delaware  corporation (the "Company"),  and BARRY GOLDSTEIN
(the "Optionee").

     WHEREAS,   simultaneously   herewith,  the  Company  is  entering  into  an
Employment Agreement with the Optionee (the "Employment  Agreement") pursuant to
which the Optionee is to perform certain  employment duties and services for the
Company; and

     WHEREAS,  the  Company  desires to provide to the  Optionee  an  additional
incentive to promote the success of the Company.

     NOW,  THEREFORE,  in  consideration  of the  foregoing,  the Company hereby
grants to the  Optionee  the right and option to purchase  Common  Shares of the
Company under and pursuant to the terms and  conditions  of the  Company's  1998
Stock Option Plan (the "Plan") and upon the following terms and conditions:

     1. GRANT OF OPTION. The Company hereby grants to the Optionee the right and
option (the "Option") to purchase up to One Million (1,000,000) Common Shares of
the Company (the "Option Shares") during the following periods:

          (a) All or any part of Four Hundred  Thousand  (400,000) Common Shares
     may be  purchased  during  the  period  commencing  on March  31,  2002 and
     terminating at 5:00 P.M. on March 31, 2006 (the "Expiration Date").

          (b) All or any part of Two Hundred  Thousand  (200,000)  Common Shares
     may be  purchased  during  the  period  commencing  on March  31,  2003 and
     terminating at 5:00 P.M. on the Expiration Date.

          (c) All or any part of Two Hundred  Thousand  (200,000)  Common Shares
     may be  purchased  during  the  period  commencing  on March  31,  2004 and
     terminating at 5:00 P.M. on the Expiration Date.

          (d) All or any part of Two Hundred  Thousand  (200,000)  Common Shares
     may be  purchased  during  the  period  commencing  on March  31,  2005 and
     terminating at 5:00 P.M. on the Expiration Date.

     2. NATURE OF OPTION.  The Option is intended  to meet the  requirements  of
Section  422 of the  Internal  Revenue  Code of 1986,  as  amended,  relating to
"incentive stock options."

     3. EXERCISE PRICE. The exercise price of each of the Option Shares shall be
Twenty-Five Cents ($.25) (the "Option Price").

     4. EXERCISE OF OPTIONS.  The Option shall be exercised in  accordance  with
the

<PAGE>

provisions  of the Plan. As soon as  practicable  after the receipt of notice of
exercise  and  payment  of the Option  Price as  provided  for in the Plan,  the
Company shall tender to the Optionee a certificate issued in the Optionee's name
evidencing the number of Option Shares covered thereby.

     5. TRANSFERABILITY. The Option shall not be transferable other than by will
or the laws of descent and  distribution  and,  during the Optionee's  lifetime,
shall not be exercisable by any person other than the Optionee.

     6. TERMINATION OF EMPLOYMENT.  Once any portion of the Option has vested in
accordance  with  Paragraph 1 hereof,  that  portion of the Option  shall remain
exercisable until the Expiration Date notwithstanding any subsequent termination
of employment with the Company or its subsidiaries for any reason whatsoever. In
addition,  in the event the Optionee's employment with the Company is terminated
by the Company  without "cause" (as defined in the Employment  Agreement),  that
portion of the Option that,  following such  termination  date,  would have next
vested  in  accordance   with  Paragraph  1  hereof  shall  become   immediately
exercisable   and  shall   remain   exercisable   until  the   Expiration   Date
notwithstanding such termination of employment.

     7.  INCORPORATION  BY REFERENCE.  The terms and  conditions of the Plan are
hereby incorporated by reference and made a part hereof.

     8. NOTICES.  Any notice or other  communication  given  hereunder  shall be
deemed  sufficient if in writing and  delivered  personally or sent by facsimile
transmission,  overnight mail or courier or registered or certified mail, return
receipt  requested,  postage  prepaid,  addressed  to the  Company at 90 Merrick
Avenue,  East  Meadow,  NY  11554,  Attention:   Secretary  (fax  number:  (516)
794-4529),  and to the  Optionee at the address set forth below or to such other
address as either party may hereafter designate in writing to the other party in
accordance  with the  provisions  hereof.  Notices  shall be deemed to have been
given on the date of  mailing  or  transmission,  except  notices  of  change of
address, which shall be deemed to have been given when received.

     9. BINDING  EFFECT.  This Agreement  shall be binding upon and inure to the
benefit  of the  parties  hereto  and their  respective  legal  representatives,
successors and assigns.

     10. ENTIRE AGREEMENT. This Agreement,  together with the Plan, contains the
entire  understanding  of the parties  hereto with respect to the subject matter
hereof and may be modified only by an instrument executed by the party sought to
be  charged.  No  amendment  on the part of the  Company  shall be valid  unless
approved by its Board of Directors.

     11.  GOVERNING LAW. This  Agreement  shall be governed by, and construed in
accordance  with,  the laws of the  State of New York,  excluding  choice of law
rules thereof.

     12.  EXECUTION  IN   COUNTERPARTS.   This  Agreement  may  be  executed  in
counterparts, each of which shall be deemed to be an original, but both of which
together shall constitute one and the same instrument.

     13.  FACSIMILE  SIGNATURES.  Signatures  hereon which are  transmitted  via
facsimile shall be deemed original signatures.

                                        2

<PAGE>

     14.  REPRESENTATION BY COUNSEL;  INTERPRETATION.  The Optionee acknowledges
that he has been  represented  by counsel  in  connection  with this  Agreement.
Accordingly,  any rule or law or any  legal  decision  that  would  require  the
interpretation  of any claimed  ambiguities in this Agreement  against the party
that drafted it has no application and is expressly waived by the Optionee.  The
provisions of this Agreement shall be interpreted in a reasonable manner to give
effect to the intent of the parties hereto.

     15.  HEADINGS.  The headings and captions  under sections and paragraphs of
this  Agreement  are for  convenience  of  reference  only and do not in any way
modify,  interpret  or  construe  the intent of the parties or affect any of the
provisions of this Agreement.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.


                                          DCAP GROUP, INC.


                                          By:/s/ Morton L. Certilman
                                             ----------------------------------
                                             Morton L. Certilman, Secretary

                                          /s/ Barry Goldstein
                                          -------------------------------------
                                          Barry Goldstein

                                          P.O. Box 450
                                          Hewlett, New York  11557
                                          -------------------------------------
                                          Address

                                          (516) 374-4484
                                          -------------------------------------
                                          Fax Number



                                        3

<PAGE>



</TEXT>
</DOCUMENT>
